Money and Finance
Lesson 1: Know what your investment style is before you start investing. Granted different situations call for different styles, but you should know your core investment style and goals that you're after. I unfortunately didn't really plan this out but have settled on focusing on dividend growth stocks with the occasional pure growth.
Lesson 2: Be wary of small lot purchases. I funded my brokerage account and was ready to trade as soon as the money hit the account. My first lesson learned is to be wary of commissions. I decided I wanted to buy some EOG Resources (EOG) and felt that $94.50 was a decent price given they're substantial acreages in some big name domestic shale plays. They were able to get in early which means cheap in the Eagleford shale and have had unheard of production from the wells they've completed there. Unfortunately being a beginning investor I didn't have much capital to invest and so I had to make some decisions. I was ready to own the world through my investing and didn't allocate nearly enough to the shares I purchased. I spent nearly 1/3 of my capital at the time to purchase 4 shares at $94.50. Not smart. The shares had to appreciate by 2.1% just to break even to my new adjusted cost basis. Not to mention that to sell I have to dish out another $7.95 in commission meaning the shares have to appreciate a further 2.1% for me to truly break even. So my lesson has been learned.
Lesson 3: Have the courage of your convictions and purchase more shares to average down. I truly believed that EOG would climb in value. Unfortunately the Euro mess arrived and pushed the shares down to the low $70's, I think they even touched the upper $60's. I thought that my belief's were right but I was still a 2 month old when it came to individual stock picking. My capital had grown through new investments but I still didn't have enough to commit to a further position. So instead of averaging down to a cost basis in the low to mid $80's or lower depending on how much I wanted to invest I'm sitting on around a 5.4% gain instead of the 20-30% gain that I could have been at. So lesson learned is if the stock goes down and nothing has changed think of it as a sale.
- Recent Buy
To close out May, I decided to go on and purchase some shares of Chevron. I've been eyeing shares for a while now and finally pulled the trigger. I think I was early on the purchase because there's still about 2.5 more months until the next...
- Recent Sell
This afternoon I decided to go on and sell out of my position in Pfizer (PFE). I sold all shares at a price of $23.79 which netted a gain of $114.24 on the position. The shares had a YOC of 4.71% which was nice and they were due for a dividend increase...
- Recent Sell
Today I sold out of my position in SORL Auto Parts, Inc. I knew for a while that I should have just closed the position but I purchased shares when I first started investing thinking that they would turn into the next worlds largest auto parts manufacturer...
- What Matters In The Long Run
Here is a guest post from my friend Adrian Lane that shows what long term time horizons can do, how they massively overweight any other single advantage, and a lesson on when to sell: "In the 1990s, working in tech during the great Internet surge, cash...
- Dividend Reinvesting Or Not?
I was thinking for a while to reinvest dividends automatically or not. I used to reinvest dividends automatically. Then I decided not to reinvest it automatically since I plan to sell stocks at some point and so I didn't want to have short term sale...
Money and Finance
Lessons 1, 2 & 3 learned
Lesson 1: Know what your investment style is before you start investing. Granted different situations call for different styles, but you should know your core investment style and goals that you're after. I unfortunately didn't really plan this out but have settled on focusing on dividend growth stocks with the occasional pure growth.
Lesson 2: Be wary of small lot purchases. I funded my brokerage account and was ready to trade as soon as the money hit the account. My first lesson learned is to be wary of commissions. I decided I wanted to buy some EOG Resources (EOG) and felt that $94.50 was a decent price given they're substantial acreages in some big name domestic shale plays. They were able to get in early which means cheap in the Eagleford shale and have had unheard of production from the wells they've completed there. Unfortunately being a beginning investor I didn't have much capital to invest and so I had to make some decisions. I was ready to own the world through my investing and didn't allocate nearly enough to the shares I purchased. I spent nearly 1/3 of my capital at the time to purchase 4 shares at $94.50. Not smart. The shares had to appreciate by 2.1% just to break even to my new adjusted cost basis. Not to mention that to sell I have to dish out another $7.95 in commission meaning the shares have to appreciate a further 2.1% for me to truly break even. So my lesson has been learned.
Lesson 3: Have the courage of your convictions and purchase more shares to average down. I truly believed that EOG would climb in value. Unfortunately the Euro mess arrived and pushed the shares down to the low $70's, I think they even touched the upper $60's. I thought that my belief's were right but I was still a 2 month old when it came to individual stock picking. My capital had grown through new investments but I still didn't have enough to commit to a further position. So instead of averaging down to a cost basis in the low to mid $80's or lower depending on how much I wanted to invest I'm sitting on around a 5.4% gain instead of the 20-30% gain that I could have been at. So lesson learned is if the stock goes down and nothing has changed think of it as a sale.
- Recent Buy
To close out May, I decided to go on and purchase some shares of Chevron. I've been eyeing shares for a while now and finally pulled the trigger. I think I was early on the purchase because there's still about 2.5 more months until the next...
- Recent Sell
This afternoon I decided to go on and sell out of my position in Pfizer (PFE). I sold all shares at a price of $23.79 which netted a gain of $114.24 on the position. The shares had a YOC of 4.71% which was nice and they were due for a dividend increase...
- Recent Sell
Today I sold out of my position in SORL Auto Parts, Inc. I knew for a while that I should have just closed the position but I purchased shares when I first started investing thinking that they would turn into the next worlds largest auto parts manufacturer...
- What Matters In The Long Run
Here is a guest post from my friend Adrian Lane that shows what long term time horizons can do, how they massively overweight any other single advantage, and a lesson on when to sell: "In the 1990s, working in tech during the great Internet surge, cash...
- Dividend Reinvesting Or Not?
I was thinking for a while to reinvest dividends automatically or not. I used to reinvest dividends automatically. Then I decided not to reinvest it automatically since I plan to sell stocks at some point and so I didn't want to have short term sale...